Wrap Text
Extracts from financial results for the year ended 31 December 2023
Kore Potash plc
(Incorporated in England and Wales)
Registration number 10933682
ASX share code: KP2
AIM share code: KP2
JSE share code:KP2
ISIN: GB00BYP2QJ94
("Kore Potash" or the "Company" or the "Group")
Extracts from financial results for the year ended 31 December 2023
Kore Potash, the potash development company with 97%-ownership of the Kola and DX Potash
Projects in the Sintoukola Basin, located within the Republic of Congo ("RoC"), today reports its
audited financial results and operational highlights for the year ended 31 December 2023 ( the
"Period").
The full financial report including its Corporate Governance Statement is available online at the
Company's website at https://korepotash.com/investors/results-and-reports/ The financial
statements contained within this announcement should be read in conjunction with the notes
contained within the full financial report.
Highlights
• On 24 January 2023, the Company announced an update of the JORC (2012) compliant
Mineral Resource, Ore Reserve, PFS information and Production Target at the DX Project. The
updated Mineral Resource incorporates the most recent drilling results and interpretation of
the geophysical data.
• On 21 August 2023 the Minister of Mines wrote a letter to Kore Potash that pledges the
Ministry and the Republic of Congo's support for Kore's development of its projects at Kola
and Dougou. The Minister acknowledged that some of the development objectives for the
Projects, as outlined in the Mining Convention, have not yet been met. He also assures the
Ministry's steadfast support, in the form of a moral guarantee, to assist in addressing
remaining challenges to completing the financing of Kola. The Minister reaffirmed the validity
of the Company's mining tenement titles and the Mining Convention which is the operating
agreement between the Company and the Government.
• This dialogue has included meetings between the Ministry and members of the Summit
Consortium who intend to provide royalty and debt financing to cover the full construction
cost of Kola and SEPCO who intend to construct Kola on an Engineering, Procurement and
Construction contract basis.
• Throughout 2023 representatives of Kore Potash have maintained increased levels of dialogue
with the Ministry of Mines, including with the Minister of State and Minister of Geology and
Mining Industry, Mr Pierre Oba. This dialogue has been aimed at improving the Ministry's
understanding of the Company's projects at Kola and Dougou, the capability of the intended
financiers for Kola, the intended construction partner and the processes the Company must
work through towards securing financing for the construction of the Kola Potash Project.
• SEPCO has had personnel living in the RoC for the past 24 months who continue dialogue with
potential in-country service providers and who have conducted several Kola site visits
collecting information for both the Study and the Works. Additionally, SEPCO mobilised a
larger team to Kola for four months in the second half of 2023 to source additional information
to enable the Works finalisation, including the planned service corridors, conveyor route, and
geomechanical information on foundation materials in the proposed processing plant and
infrastructure areas. These findings were presented to PowerChina in early December 2023.
• PowerChina, SEPCO and the subcontractors, in pursuit of the timeline objectives, commenced
the Works before reaching an agreement with the Company on costs.
• PowerChina subcontracted five technical groups who commenced additional design and
engineering works. Specific design areas included the underground mine, mineral processing
jetty and transhipment operations, energy transportation and storage, conveyor systems and
material handling. PowerChina advised the Company that the Works would cost in excess of
USD10 million to complete. Illustrating PowerChina's commitment to Kola, it capped Kore
Potash's contribution at a maximum of USD5 million, with the balance of the costs to be paid
by PowerChina.
• Two payments of USD1.0 million each were made in August and November 2023 as required
under the Agreement. The remaining USD 3 million of which USD 800,000 payable up to 6
weeks from the date PowerChina and SEPCO having presented to Kore a "complete
contractual document capable of finalising the financing arrangement of the Kola Project and
capable of acceptance by Kore to form a binding construction contract" and USD 2.2 million
to be paid subject to Kore concluding its fund raise with a target date of no later than 12
months of the signing of the Engineering, Procurement and Construction ("EPC") contract.
• On 8 August 2023, Kore Potash entered into a revised agreement with SEPCO to provide the
Company with an EPC contract for the construction of the Kola Project. Following the
completion of SEPCO's parent company, PowerChina's, review of the Kola design and
construction schedule, one of the agreed outcomes was that further engineering design works
must be completed before PowerChina and SEPCO jointly presenting an EPC proposal and EPC
contract to the Company.
• Summit Consortium has confirmed that the financing proposal for the full capital cost of Kola
will be provided within six weeks of finalisation of EPC contract terms.
• PowerChina has delivered EPC proposal and draft EPC contract on 6 February 2024.
• Kore Potash and SEPCO/PowerChina will now further negotiate the EPC proposal and draft
the EPC contract, targeting signing full EPC documentation in Q2 2024.
• On 22 March 2024 the Company raised USD 530,000 via issue of five separate Convertible
Loan Notes ("CLNs"). The net proceeds from the CLNs will be used to further advance work
that is expected to lead to signing of an EPC contract for the Kola Potash Project and provide
working capital for Kore Potash. Each Convertible Loan has a zero interest coupon and is
convertible into new ordinary shares of US$0.001 each in the Company at a price of 0.38 pence
per new Ordinary Share and will be converted immediately after publication of the 2023
Annual Report on 28 March 2024. Subject to the conversion of the CLNs the Company will
issue 109,865,053 new Ordinary Shares in the Company.
• On 22 March 2024 the Company also announced that it is the intention of David Hathorn,
Chairman and Interim CEO, to subscribe for new ordinary shares of the Company for a
consideration of USD 150,000 as soon as practicable following publication of the 2023 Annual
Report and on the same terms as the CLNs.
David Hathorn, Chairman & Interim CEO of Kore Potash, commented: "During 2023, the Company
continued to make tangible progress towards the financing of the Kola Project.
PowerChina delivered its Engineering, Procurement and Construction proposal and draft EPC contract
on the 6th of February 2024. The Company and PowerChina are now working towards signing EPC
contract in Q2 2024.
Global events continue to reinforce the importance of potash in the production of food and the need
for the development of new potash projects outside the traditional northern hemisphere potash
production regions.
Our potash projects stand out globally. With very high in situ quality, significant resources and a
beneficial location, we believe the Sintoukola Basin is one of the most promising undeveloped potash
regions in the world. It has the potential to produce Muriate of Potash needed by farmers around the
world for generations."
Summary of financials
• During the Period, the Group's Total Comprehensive income was USD 3,955,201 (2022: Loss
USD 10,174,361), and the Group experienced net cash outflows from operating and
investing activities of USD 6,983,319 (2022: USD 5,744,285). Cash and cash equivalents
totalled USD 1,583,657 as at 31 December 2023 (2022: USD 5,046,629).
• Group net assets increased in the year to USD 175,089,299 (2022: USD 167,650,279). This
was primarily driven by a USD 13,642,063 increase in exploration capitalised.
• The Directors prepared a cash flow forecast for the period ending 30 June 2025, which
indicates that the Group will not have sufficient liquidity to meet its working capital
requirements to the end of the going concern period (March 2025). Please refer to Note 1
(b) to the financial statements for more detail on the going concern statement.
• The Company will be required to raise funds in Q2 2024 for the working capital
requirements for Kore Potash for the period up to signing full EPC documentation and the
financing proposal for the complete construction of Kola from the Summit Consortium to
ensure the realisation of assets on an orderly basis and the extinguishment of liabilities as
and when they fall due.
• Upon signing the EPC documentation and financing for the construction of Kola additional
capital will be required until the commencement of production.
• The Directors have considered various mitigating actions, which include raising additional
capital to enable the Group to continue to fund its working capital requirements.
Salient consolidated financials required to be disclosed under the JSE Listings Requirements
31 December 2023 31 December 2022 Change
USD USD USD
Interest Income 54,107 66,956 (12,849)
Loss for the year (1,091,055) (1,513,953) 422,898
Headline loss per share (0.03) (0.04) 0.01
Basic loss per share (0.03) (0.04) 0.01
Diluted loss per share (0.03) (0.04) 0.01
Short-form announcement
This short-form announcement is the responsibility of the board of directors of Kore Potash and is a
summarised version of the Group's full announcement and financial results and as such, it does not
contain full or complete details pertaining to the Group's results for the financial year ended
31 December 2023. Any investment decision should be made after taking into consideration the full
annual results for the financial year ended 31 December 2023. The full announcement and the annual
results for the financial year ended 31 December 2023 is available on the JSE's website at
https://senspdf.jse.co.za/documents/2024/jse/isse/kp2e/FY2023.pdf and on the group's website at
https://korepotash.com/investors/results-and-reports/
The full announcement and annual report for the financial year ended 31 December 2023 can be
requested via direct message under the contact section on the company website at
https://korepotash.com/contact/offices/
END
28 March 2024
For further information, please visit www.korepotash.com or contact:
Kore Potash Tel: +44 (0) 20 3963 1776
David Hathorn – Chairman & Interim CEO
Andrey Maruta – CFO
Tavistock Communications Tel: +44 (0) 20 7920 3150
Nick Elwes
Adam Baynes
SP Angel Corporate Finance – Nomad and Broker Tel: +44 (0) 20 7470 0470
Ewan Leggat
Charlie Bouverat
Shore Capital – Joint Broker Tel: +44 (0) 20 7408 4050
Toby Gibbs
James Thomas
Questco Corporate Advisory – JSE Sponsor Tel: +27 (11) 011 9205
Doné Hattingh
Date: 28-03-2024 09:00:00
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